In an annual review of its business plans, Eli Lilly (LLY) revealed China‚Äôs pharmaceutical market will be a top priority for the company.

In an annual review of its business plans, Eli Lilly (LLY) revealed China‚Äôs pharmaceutical market will be a top priority for the company. Lilly has reorganized its corporate structure so that one of its six units would be devoted to emerging markets, and this unit will aim at taking advantage of the expected growth in China. Because one-third of worldwide growth in pharmaceutical markets will come from emerging markets, Lilly decided to recognize the importance of these new markets in its corporate goals.
As Lilly pointed out, it has already begun taking steps to increase its pharmaceutical presence in China. Currently, with its 2008 China revenues topping $200 million, Lilly is the 11th ranked big pharma in China. Its 2009 revenues are running 20% higher than last year.
The company has doubled its employee count from 1,100 to about 2,200, and it is currently building a second manufacturing plant in Suzhou to produce insulin (insulin has its own unit in Lilly‚Äôs corporate structure, the only disease to have a dedicated division).
In a press release, Lilly listed three initiatives that will help the company increase its impact in emerging markets:
* Maximize Lilly\'s core assets, including both patented and post-patent medicines. Two key tactics are to accelerate new product launches and to capitalize on longer product lifecycles in select countries such as China.
* Add select non-Lilly medicines to build upon core therapeutic areas, especially diabetes, oncology and neuroscience, to accelerate top-line growth. This could include product acquisitions and co-promotion or co-marketing agreements.
* Establish local alliances to more effectively access fast-growing market segments in select countries where the company\'s current infrastructure is not well suited to capture growth.
On the drug development side, Lilly has implemented a partnering strategy in China rather than establishing an in-house R&D facility. It is proud that it does not own a single test tube in the PRC.
However, it is developing risk sharing arrangements with local companies, including a division of ShangPharma called Shanghai ChemExplorer that is devoted to working on Lilly‚Äôs projects. It also has a cancer/inflammation partnership with the Hutchison MediPharma division of Chi-Med [AIM: HCM],